Congratulations! You just became a parent. If you are lucky, you will get to be a proud and loving parent for the rest of your life, receiving all the benefits that parenthood awards those worthy enough to seek it. However, there still looms that possibility that no new parent likes to dwell on — what if the worst happens and you lose your child, forever?
It’s a hard issue to grapple with; no one wants to consider the possible death of a child. Still, because it is so unexpected and heartbreaking, it is one of the most important life events to be prepared for. Life insurance may seem like an adult’s concern, but more and more parents are looking into life insurance for their children. Despite the arguments of detractors, life insurance for your children is a wise investment, and something you should see if your employer offers.
Since child labor laws were enacted toward the middle of the last century, it has become extremely difficult for children to generate any substantial income. Sure, there are the lemonade stands and craft sales, and maybe your kid has a particular talent at decorating cupcakes, but for most families, these endeavors cost more than they rake in.
For the most part, life insurance in adults is used to replace a lost income. For example, if both spouses of a married couple work for wages, both spouses might have life insurance so that in the event of one of their deaths, the death does not affect the survivor’s stable living situation (at least financially, that is). Many detractors of child life insurance argue that because children do not provide any income to the family, the death of a child would not destabilize the family’s finances.
However, what critics fail to realize is that a child’s death does, in fact, generate a loss in income. Many parents expect that their children will care for them when they are older. The grown children will be utilizing their income to provide for their ailing parents. Thus, though the children at their time of death may not have any real income to speak of, it is their potential wages and care that the parents lose. Life insurance on a child will be able to pay back those wages to help grieving parents continue to save for their retirement and old age.
Many attackers claim that life insurance needs more than 20 years to really pay off and that when it comes to children, putting that money into some kind of long-term savings or investments would be more useful over time. Stocks and investments can be risky, but choosing the right ones may allow you to be more flexible and earn more over long periods of time.
However, your child may be healthy now, but health crises and accidents can happen to anyone at any time. There is no guarantee that within a couple months your child won’t develop fast-acting cancer or be involved in a vehicle collision.
In this event, you need the financial boost of life insurance to help pay for funeral costs and provide an income during your grieving period. Because it’s unlikely you’ll be able to go to work during this trying time, the payout on your child’s life insurance policy will keep your finances stable despite this unexpected upset.
If you choose to invest that money into some kind of savings, you might not have generated a sufficient amount if tragedy strikes. Death occurs without any warning, and you want to feel secure in your finances come what may.
Children’s life insurance policies are generally rather inexpensive, from $2.50 to $6.25 per month, because the death of a child is such an unlikely event in this day and age. This is a miniscule amount to pay for peace of mind about your child’s life; plus, most plans are scalable and can be converted to an adult policy once the child comes of age.
Another slightly more expensive option allows children to retain the same $50,000 policy for the entirety of their lives, meaning they don’t have to worry about organizing their own policies when they’re starting a family and really digging into their work. Plus, the sooner you purchase life insurance for your child, the better; many firms offer locked-in prices on premium plans, so your child will never have to worry about keeping up with increasing rates, even well into the future.
With ever-changing workforce, employees are clamoring for new and different benefits than the generation past. More men want more paternity leave, and flexible hours are becoming the norm for most employees. Employers have long offered employees health insurance that extends to their dependent family members, and life insurance options are often available through good PEOs.
If you are serious about the health (both financial and otherwise) of your family, consider researching whether your employer offers child life insurance; you might be glad that you did.
Avoiding the possibility of your child’s death will not guarantee that it won’t happen. When you are faced with any possible obstacle, the best course of action is to make a concrete and viable plan to overcome it. Life insurance for your child is a weighty decision, but you might find that it is the best option for your family’s health and future.Back to blog list